Macro-prudential supervision - a panacea for the global financial crisis?

This article assesses the role of macro-prudential supervision as an effective policy tool in the global financial crisis. The article analyses the role of financial regulation in the current global crisis and the roots of regulatory weakness in contributing to the vulnerabilities in the financial system. It examines the role of a macro-prudential approach to supervision in promoting effective governance of the international financial markets and its potential for enhancing global financial stability and the issues of implementing this approach for national governments.